PM says farm loan waiver scheme to clean up bank balance sheets
Prime minister Manmohan Singh today said the proposed Rs 60000 crore farm loan waiver scheme announced in Union Budget 2008-09, would provide relief to farmers and clean up balance sheets of banks. The debt relief scheme will be completed by June 2008, Singh said in parliament.
Singh also said the government was seeking a broadest possible consensus on Indo-US nuclear deal.
PM says government determined to end agricultural distress
Prime Minister Manmohan Singh today said BJP led National Democratic Alliance (NDA)s policies were anti-farmer and anti-agriculture. Low minimum support prices impoverished farmers, he added.
Singh said the government is determined to end agricultural distress which was why the government took the historic initiative to waive farmers' loans on an unprecedented scale. A debt relief scheme of this magnitude has never been conceived or attempted before, Singh said. The Union Budget 2008-09 announced on Friday, 29 February 2008, announced a massive Rs 60000-crore loan waiver package to farmers.
If bankruptcy is a permissible form of business outcome in industry, what is irrational about this waiver? he asked. Sing said the debt waiver to farmers will stimulate economic activity in rural areas.
Singh said the debt relief of Rs 60,000 crore covers all scheduled commercial banks, regional rural banks and co-operative banks. It covers both production and direct investment. It is not just about non-performing assets, it is also about overdues.
He assured the house that the debt relief will be a simple exercise, and it will not be a long drawn affair.
Sharing the concern of members over many farmers being in the clutches of money lenders, the Prime Minister said for those who are outside the pale of institutional credit and cannot benefit from the waiver, a special programme has been started. This programme of financial inclusion is to ensure that each and every farmer has a bank account and is able to access institutional credit. It has achieved a degree of success in some districts. We hope to see the same results across the country. States have to work hard to ensure that financial inclusion becomes a reality.
Singh said banks will be compensated as and when the loans become due. The details are being finalized, he said. The government will make adequate provisions from tax and non-tax revenue over this period to fund the package, he added.
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